[Last Update: 10/6/2026]
U.S. DOT has issued a Fi(opens in new tab)nal Rule(opens in new tab) making changes to the Disadvantaged Business Enterprise (DBE) program. The Final Rule largely maintains the framework put in place in the Interim Final Rule(opens in new tab) (IFR) issued in October 2025, removing the automatic presumption of disadvantage based on race and gender and requiring an individual demonstration of economic and social disadvantage. U.S. DOT concluded that the rebuttable presumption is unconstitutional and a change to the program is required.
Under the rule, all applicants have to provide a narrative and evidence of individualized social and economic disadvantage. This is similar to the changes made to the Small Business Administration (SBA) 8(a) program in response to constitutional challenges.
Key Components of the IFR
- Re-certification: Every currently certified DBE will lose certification and must undergo reevaluation. Firms will be required to submit new documentation and personal narratives to establish eligibility.
- Burden of proof: The burden of proof is on the applicant firm.
- Suspension of goals: Until reevaluation is complete by the certifying agency, federal funding recipients may not set DBE contract goals or count DBE participation toward existing goals.
- Existing contracts: Nothing in the rule mandates the cancellation of existing contracts. Pending solicitations and procurements may need to be suspended and rewritten.
- Retention of Personal Net Worth cap and size standards: The rule retains compliance with the PNW cap and alignment with the small business size standards in the current program.
The rule replaces the terms “race-conscious” and “race-neutral” with “DBE-conscious” and “DBE-neutral”. It also replaces the term “discrimination” with “social and economic disadvantage”.
There are also changes to record-keeping and recording, goal setting, and how disparity studies are to be conducted.
New Standard for Certification
In order to be certified as a DBE, an applicant firm must
(1) Demonstrate that the owner is socially and economically disadvantaged based on his or her own experiences and circumstances that occurred within American society, and without regard to race or sex;
(2) Submit a personal narrative establishing the existence of disadvantage by a preponderance of the evidence based on individualized proof regarding specific instances of economic hardship, systemic barriers, and denied opportunities that impeded the owner’s progress or success in education, employment, or business, including obtaining financing on terms available to similarly situated, non-disadvantaged persons;
(3) State how and to what extent the impediments caused the owner economic harm, including a full description of type and magnitude, and establish the owner is economically disadvantaged in fact relative to similarly situated non-disadvantaged individuals.
Modifications Made in the Final Rule
(1) The Department clarified that determinations of disadvantage may include consideration of race and gender. The Final Rule states that “Eligibility determinations must be based on individualized evidence concerning the applicant’s own experience and circumstances, including evidence of discrimination, social barriers, denied opportunities, or other factors that the applicant contends contributed to social and economic disadvantage” and may include consideration of race and gender.
(2) DOT set a final deadline of December 24, 2026 for certifying agencies to complete their reevaluations.
(3) The Department clarified interstate certification expectations and confirmed a simplified process once the home state has completed a firm’s recertification. Once the jurisdiction of original certification reevaluates a firm under the new standards, “other States should automatically accept that decision upon simple notification, such as a letter or a screenshot showing the firm’s status” in the updated DBE directory and that “no further requirements may be imposed.”
ACEC Resources
Engineering Firms with DBE Certifications: The New U.S. DOT Policy and Next Steps
ACEC Fall Conference session | October 7, 2025
Presentation slides
Listen to the recording of the session:
DBE Next Steps: A Four-Part Online Series to Prepare You for Change
June-July 2025
Online course series available on demand
Disadvantaged Business Enterprise (DBE) Programs – Status of Legal Challenges, Potential Outcomes, and What A/E Firms Need to Know
December 11, 2024
Online class available on demand